While most people are interested in what the vast stores of methane being unlocked from the Marcellus Shale formation mean for the economic growth of the region, there is more than just natural gas being produced in this energy boom—and there are business opportunities associated with these secondary products as well.
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RANDY WOELFEL (Photo by Christian Morrow)
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During the African American Chamber of Commerce’s first PowerBreakfast meeting of the new year, Nova Chemicals CEO Randy Woelfel asked members to advocate for Marcellus development, noting that his company is poised to see an impressive expansion due to just one of these secondary shale products—ethane.
One of Nova’s primary businesses is turning ethane into polyethylene and expanded polystyrene, plastics used every day in packaging for products ranging from dry cereal, to dog food and cat litter.
“We are 2500 people passionate about materials and polymers and this year we will have between $6 billion and $6.5 billion in revenue,“ he said. “Remember that line in ‘The Graduate’ where Mr. Robinson tells Ben ‘plastics?’ Well I’d amend that to “I only have one thing to say to you—Marcellus.’”
Woelfel urged chamber members to contact any of the Marcellus producers and ask to take a tour of some facilities, because opportunities are all over.
“I was out in Washington County with Range Resources and went by this diner that a few years ago maybe did 1,000 meals in a week,” he said. “Now, they are doing 1,000 a day.”
He noted a small mechanical equipment rental business that had vastly expanded and another company, Mark West, that separates gasses like ethane and butane for natural gas, has dozens of storage tanks where it had only one or two before. And then there are the residents who are fueling other businesses because they get royalty checks for the gas produced on their property, “mailbox money.”
“All you need to do is look at the fences—they’re new, or newly painted, and there are new roads,” he said. “This is a once-in-a-lifetime gift, a half-trillion dollar industry that is making a difference for all of us because we now hold a lot of the cards in the energy game.”
In 2005, Woelfel said, the natural gas cost $15 per million BTUs. Today, thanks to Marcellus and other shale gas finds, the price is $2.50 per million BTUs. That means materials companies like Nova that are tied to natural gas rather than oil have a 40-1 cost advantage. It also means Nova will be spending between $1 billion and $2 billion on upgrades in the next six years.
In thanking Woelfel, Chamber President and CEO Doris Carson Williams said she was planning a future meeting for members about doing business directly with Nova.
She then thanked her members for helping to make the chamber’s last diabetes workshop at WQED a success, particularly those who participated in the video the station produced. She reminded everyone that the next diabetes workshop with author Heather Worthy focuses on exercise and is scheduled for Feb. 21.
The guest for the February PowerBreakfast meeting will be Pittsburgh Controller Michael Lamb.
(Send comments to cmorrow@newpittsburghcourier.com.)
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